PRECIOUS-Gold rises above $1,060 an ounce on weak US$

SYDNEY, Oct 20 (Reuters) - Gold surged past $1,060 an ounce
on Tuesday and headed back toward last week's record highs,
boosted by a falling U.S. dollar.

The dollar sank to near 14-month lows [USD/] after currency
investors bet the Federal Reserve would hold U.S. interest
rates near zero well into 2010. Gold is regarded as a hedge
against the weakening value of paper assets due to currency
depreciation.

A nationwide strike by miners in Peru, the world's sixth
largest gold producer, also improved buying sentiment.

Spot gold XAU= stood at $1,064.55/$1,066.55 an ounce at
2200 GMT against $1,060.70 in late New York trade on Monday.

Near-term resistance is seen around $1,068, a level it
tested before breaking through to a record high of $1.070.40 on
Oct. 14. Support is seen at $1,055.43, the 10-day moving
average.

U.S. December gold futures GCZ9 were up $6.90 or 0.65
percent at $1,065 an ounce in the COMEX division of the New
York Mercantile Exchange.

(Reporting by Bruce Hextall; Editing by Mark Bendeich)